We have studied the hormonal regulation of bone cell metabolism and differentiation using as a test system bone cells which have been isolated from the calvaria of rat fetuses by collagenase dissection. A method has been developed for growing bone cells in primary culture in serum-free medium, and there is reason to believe that these cells undergo osteoblastic differentiation and that they elaborate a growth factor. Periosteal cells and cells from subperiosteal bone exhibit substantial differences in hormonal responsivity, the former responding preferentially to calcitonin, the latter to parathyroid hormone. There is reason to believe that the latter cell population is enriched in osteoblasts. Cultured bone cells become refractory to parathyroid hormone after an initial period of treatment. This process of desensitization is not hormone-specific, and appears to stem from an induced modulation of adenylate cyclase activity. Adenosine has been found to be a stimulator of bone cell adenylate cyclase, and evidence has been marshalled to suggest that it acts by interfering with the inhibitory effect of uncomplexed ATP. BIBLIOGRAPHIC REFERENCES: Peck, W.A., J.K. Burks, J. Wilkins, S.B. Rodan, and G.A. Rodan. Evidence for preferential effects of parathyroid hormone, calcitonin and adenosine on bone and periosteum. Endocrinology 100 (5) : 1347-1364, May, 1977. Burks, J.K., and W.A. Peck. Evidence for proliferation and differentiation of bone cells cultured in synthetic medium. FASEB, Chicago, 1977.